Suit over Yahoo's unsolicited text messages headed to California Supreme Court

By Gabriel Neves | Jan 18, 2019

SAN FRANCISCO — Tech giant Yahoo's case against an insurer refusing to cover as personal injury the alleged privacy violations brought about by Yahoo's unsolicited text messages is headed to the California Supreme Court.

Tech giant Yahoo has obtained certification for a question to the California Supreme Court regarding a the duty of an insurance company to defend the insured that committed a Telephone Consumer Protection Act (TCPA) violation triggered by a policy that covers injury as a privacy violation.

U.S. Appeals Judges Milan Smith Jr., Jacqueline Nguyen, and U.S Court for International Trade Judge Jane Restani, on the bench of the U.S. Court of Appeals for the Ninth Circuit, issued a 13-page order on Jan. 16 in the lawsuit filed by Yahoo Inc. against National Union Fire Insurance Company.

The question, as mentioned in the order, is "Does a commercial liability policy that covers ‘personal injury,’ defined as ‘injury…arising out of…[o]ral or written publication…of material that violates a person’s right of privacy,’ trigger the insurer’s duty to defend the insured against a claim that the insured violated the Telephone Consumer Protection Act by sending unsolicited text message advertisements that did not reveal any private information?"

National Union Fire sold insurance to Yahoo to cover for liability resulting from advertising and personal injuries, resulting in the TCPA lawsuits.

Yahoo was a defendant in five class-action suits in Illinois and California, all resulting from the company sending unsolicited text messages to the class-action plaintiffs.

As stated in the order, all lawsuits "alleged that Yahoo! violated the TCPA by transmitting unsolicited text message advertisements to putative class members," with the California suits alleging that Yahoo ‘invad[ed] [the plaintiffs’] privacy’ by negligently or willfully sending them unsolicited text messages in violation of the TCPA."

National Union Fire refused to defend, and Yahoo sued the company for breach of contract. The district court granted a motion to dismiss to the insurance company.

The order is now going to California Supreme Court.

U.S. Court of Appeals for the Ninth Circuit Case number 17-16452

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